- The tax authorities are entitled to
scrutinize the valuation report and determine a fresh valuation
either by himself or by calling for a final determination from an
independent valuer.
- However, tax authorities cannot
change the method of valuation which has been opted by the tax
payer.
- Higher Discounted Cash Flow valuation
based on projected profits in the future, despite being a
loss-making entity today, upheld by Delhi ITAT.
Recently, India has witnessed various tax rulings on the
valuation of shares issued by a company, specifically DCF
valuation. Recently, while the Delhi Bench of the Income Tax
Appellate Tribunal upheld a Discounted Cash Flow
("DCF") valuation of a loss making
company in the case of India Today Online Pvt. Ltd. v. ITO Ward
12(2) New Delhi1, in TUV Rheinland NIFE Academy
Pvt. Ltd. vs. ITO,2 the Bangalore Bench of the
Income Tax Appellate Tribunal
("Tribunal") rejected the valuation of
shares conducted by the taxpayer as per the DCF
